LEASE PURCHASE AGREEMENT
(Monmouth County Renewable Energy Program, Series 2012)
By and Between
MONMOUTHCOUNTY IMPROVEMENT AUTHORITY, as Lessor
and
[COMPANY], as Lessee
Dated as of January 1,2012
with respect to the Monmouth County Improvement Authority’s
Not to exceed $50,000,000 aggregate principal amount of
County of Monmouth Guaranteed Renewable Energy Program Lease Revenue [Notes] Bonds, Series 2012 (Federally Taxable)
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TABLE OF CONTENTS
LEASE PURCHASE AGREEMENT
DEFINITIONS AND EXHIBITS
SECTION 101.Definitions.
SECTION 102.Exhibits.
SECTION 103.Inapplicable Terms.
REPRESENTATIONS, COVENANTS AND WARRANTIES; DISCLAIMERS
SECTION 201.Representations, Covenants and Warranties of Lessee.
SECTION 202.Representations, Covenants and Warranties of Lessor.
SECTION 203.Disclaimer of Lessor and Trustee.
SECTION 204.Tax Covenants of Lessee.
LEASE PAYMENTS
SECTION 301.Lease Payments.
SECTION 302.Lease Payments to be Unconditional, Except for Power Purchase Price Payments; No Abatement or Set-Off.
SECTION 303.Termination of Lease Term; Lease Payment Obligation.
SECTION 304.Return of Renewable Energy Projects upon Termination of Company Lease Agreement; CIP Acceptance State.
SECTION 305.Basic Lease Payments; Principal Portion.
SECTION 306.Basic Lease Payments; Interest Portion.
SECTION 307.Interest Calculation.
SECTION 308...... Additional Lease Payments.
SECTION 309. General Obligation of Company to Make Lease Payments; Pledge of Reimbursement Collateral; Company Pledge Agreement.
SECTION 310. Investment of Bond Resolution Funds; Credit for Certain Investment Earnings.
LEASE OF LEASED PROPERTY; TERM OF COMPANY LEASE AGREEMENT
SECTION 401.Lease of Leased Property.
SECTION 402.Lease Term.
SECTION 403.Net Lease.
CONSTRUCTION OF PROJECT; CARE AND USE; DRAW PROCEDURES
SECTION 501.Design of Project.
SECTION 502.Construction of Project.
SECTION 503.Performance Bonds and Other Guaranty.
SECTION 504.Default in Contractors’ Performance.
SECTION 505.Additional Rights of Lessee.
SECTION 506.Maintenance and Use of Project; Lessor Access; Repairs Not to Create Liens.
SECTION 507.Possession and Enjoyment of Projects during Lease Term.
SECTION 508.Lessee’s Negligence.
SECTION 509.Project Costs; Payment.
SECTION 510.Submission of Draws; Procedures; Acceptance Certificates.
SECTION 511.Reimbursement to Lessor from Moneys in the Project Fund.
SECTION 512.Construction Period Insurance.
SECTION 513.Taxes and Other Governmental Charges and Utility Charges.
SECTION 514.Site Visits.
SECTION 515.Construction Manager.
INSURANCE; TITLE TO PROJECT AND OTHER MATTERS
SECTION 601.Insurance Coverage for the Projects.
SECTION 602.Public Liability Insurance.
SECTION 603.Auto Liability Insurance.
SECTION 604.[Reserved].
SECTION 605.Worker’s Compensation Insurance.
SECTION 607.Other Insurance and Requirements for All Insurance.
SECTION 608.Indemnification.
SECTION 609.Title to Projects Upon Termination of Company Lease Agreement.
SECTION 610.No Further Encumbrances; Exceptions.
SECTION 611.Trustee Indemnification.
SECTION 612.Advances.
SECTION 613...... Net Proceeds of Insurance; Form of Policies.
SECTION 614...... Self-Insurance.
OPTION TO PURCHASE; PREPAYMENT OF LEASE PAYMENTS
SECTION 701.....Lessee’s Prepayment and Purchase Option; Purchase Option Price.
SECTION 702. Mandatory Prepayment and Purchase of Project; Mandatory Purchase Price.
SECTION 703.Effect of Prepayment.
SECTION 704.Substitution of Project.
DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS
SECTION 801.Damage, Destruction and Condemnation.
SECTION 802.Insufficiency of Net Proceeds.
SECTION 803.Cooperation of Lessor.
SECTION 804.Condemnation of Other Property Owned by Lessee.
ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
SECTION 901.Assignment by Lessor.
SECTION 902.Lease Payments to Trustee.
SECTION 903.Assignment and Subleasing by Lessee.
SECTION 904.Restriction on Mortgage or Sale of Project by Lessee.
SECTION 905.Reorganization.
EVENTS OF DEFAULT; REMEDIES
SECTION 1001.Events of Default.
SECTION 1002.Remedies.
SECTION 1003.Reinstatement.
SECTION 1004...... Election of Remedies; No Waiver of Elected Remedies.
SECTION 1005...... No Additional Waiver Implied by One Waiver.
SECTION 1006. Agreement to Pay Attorneys’ Fees and Expenses.
SECTION 1007. Late Charges.
SECTION 1008. Delay; Notice.
ADMINISTRATIVE PROVISIONS
SECTION 1101. Notices.
SECTION 1102. Severability.
SECTION 1103. Amendments, Changes and Modifications.
SECTION 1104. Further Assurances and Corrective Instruments.
SECTION 1105. Applicable Law.
SECTION 1106. Lessor and Lessee Officers.
SECTION 1107. Captions.
SECTION 1108. Company Lease Agreement is Original.
SECTION 1109. Binding; Counterparts.
SECTION 1110. Inspections Permitted.
SECTION 1111. Time is of the Essence.
SECTION 1112. No Personal Liability or Accountability.
SECTION 1113. Gender.
SECTION 1114. Receipt of Company Lease Agreement.
SECTION 1115. Waiver of Sovereign Immunity.
SECTION 1116. Approvals.
EXHIBIT A
EXHIBIT A-1
EXHIBIT A-2
EXHIBIT A-3
BASIC LEASE PAYMENT SCHEDULE
(paying 5 months prior to Series 2012 Bonds)
EXHIBIT A-4
NOTICE INFORMATION FOR SERIES 2012 LOCAL UNITS
EXHIBIT B
FORMS OF ACCEPTANCE CERTIFICATES
EXHIBIT B-1
FORM OF REP ACCEPTANCE CERTIFCATE
EXHIBIT B-2
FORM OF CIP ACCEPTANCE CERTIFICATE
EXHIBIT C
FORM OF DRAW PAPERS
EXHIBIT C-1
EXHIBIT D
CERTIFICATE OF AN AUTHORIZED OFFICER OF THE LESSEE FOR Company Development Fees and Expenses INCURRED ON BEHALF OF THE LESSEE
EXHIBIT E
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LEASE PURCHASE AGREEMENT
(Monmouth County Renewable Energy Program, Series 2012)
THIS“LEASE PURCHASEAGREEMENT(Monmouth County Renewable Energy Program, Series 2012)” (including any amendments or supplements hereto from time to time in accordance with the terms hereof, this “CompanyLeaseAgreement”), dated as of January 1,2012, is made by and among theMONMOUTH COUNTY IMPROVEMENT AUTHORITY (including any successors and assigns, the “Authority” or “Lessor”), duly created by resolutionof the Board of Chosen Freeholders (“Board of Freeholders”) of the County of Monmouth(the “County”), State of New Jersey (“State”) as a public body corporate and politic of the State pursuant to and in accordance with the provisions of the county improvement authorities law, constituting Chapter 183 of the Pamphlet Laws of 1960 of the State, and the acts amendatory thereof and supplemental thereto (as codified at N.J.S.A. 40:37A-44 et seq., the “Act”) and other applicable law, and[COMPANY], a limited liability company organized and existing under the laws of the State of Delaware, duly authorized to conduct business in the State (including any successors and assigns, the “Company” or “Lessee”).
______
WHEREAS, the Monmouth County Improvement Authority (the “Authority”) has been duly created by resolution duly adopted by the Board of Chosen Freeholders (the “Board of Freeholders”) of the County of Monmouth (the “County”) in the State of New Jersey (the “State”) as a public body corporate and politic of the State pursuant to and in accordance with the county improvement authorities law, constituting Chapter 183 of the Pamphlet Laws of 1960 of the State, and the acts amendatory thereof and supplemental thereto (as codified at N.J.S.A. 40:37A-44 et seq., the “Act”), and other applicable law;
WHEREAS, the Authority has developed a program (the “Renewable Energy Program”) for the financing, design, permitting, acquisition, construction, installation, operation and maintenance of renewable energy capital equipment and facilities such as solar panels, wind turbines, and hydro-electric, bio-diesel, geothermal, and bio-mass facilities, including any related electrical modifications, work related to the maintenance of roof warranties, or other work required, desirable or convenient for the installation of such systems (collectively, the renewable energy capital equipment and facilities, the “Renewable Energy Projects”) for and on behalf of the County and its affiliates, and the local governmental units within the County, including without limitation municipalities, boards of education for school districts, local authorities and any other local government instrumentalities, public bodies or other local government entities (collectively, including the County, the “Local Units”);
WHEREAS, the Renewable Energy Projects procured under the Renewable Energy Program, are to be installed on, in, affixed or adjacent to and/or for any other Local Unit controlled buildings, other structures, lands or other properties of the Local Units (collectively, the “Local Unit Facilities”);
WHEREAS, it may be necessary, desirable or convenient, in connection with the financing, design, permitting, acquisition, construction, installation, operation and maintenance of the Renewable Energy Projects, to finance, design, permit, acquire, construct, renovate and install certain capital improvements to the Local Unit Facilities, including without limitation, improvements to or replacement of, roofing systems, if any (the “Capital Improvement Projects” and together with the Renewable Energy Projects and any Completion Project as defined in the hereinafter defined Bond Resolution, the “Projects”), and to the extent no Capital Improvement Projects are so financed, references herein shall have no meaning;
WHEREAS, the primary goal of the Renewable Energy Program is to expand the use of renewable energy sources available and utilized by the Local Units for their Local Unit Facilities, with the attendant environmental and financial benefits associated thereby, and to reduce the energy related operating costs to the Local Units for their Local Unit Facilities;
WHEREAS, in order to implement the Renewable Energy Program, the Authority has determined to finance the respective Renewable Energy Projects and Capital Improvement Projects, if any, on, in or about the respective Local Unit Facilities, all as set forth on Exhibits A, B and Cto the hereinafter defined Local Unit License Agreement for each of the following participating Local Units:
(i)Borough of Eatontown, Township of Middletown and Borough of Tinton Falls (collectively, the “Municipal Series 2012 Local Units”); and
(ii)Little Silver Board of Education and Middletown Board of Education (collectively, the “Board of Education Series 2012 Local Units”); and
(iii)Monmouth County Vocational Technical School (the “County Series 2012 Local Units”); and
(iv)Township of Middletown Sewerage Authority (the “Sewer Authority Series 2012 Local Unit”).
(each a “Series 2012 Local Unit”, and together with any additional local governmental units within the County that might be added or removed by the Authority to the Renewable Energy Program, pursuant to the hereinafter defined Local Finance Board Application or otherwise, collectively, the “Series 2012 Local Units”), through the issuance by the Authority of one or more series of bonds and notes entitled “County of Monmouth Guaranteed Pooled Program Renewable Energy Program Lease Revenue [Notes] Bonds, Series 2012 (Federally Taxable)” dated their date of delivery, Outstanding (as defined in the Pooled Program Bond Resolution upon issuance) in the aggregate principal amount (including Sinking Fund Installments, if any, as such term is defined in the Pooled Program Bond Resolution) not to exceed $38,056,000 (the “Series 2012Pooled Program Bonds”);
WHEREAS, in order to finance the Renewable Energy Projects for the Series 2012 Local Units on, in or about their Local Unit Facilities, the Authority may sell one or more series of Series 2012Pooled Program Bonds, (i)one series by either a competitive process or by negotiated sale after the selection of an underwriter (the “Underwriter”) the terms of which sale shall be as set forth in that certain Bond Purchase Agreement between the Underwriter and the Authority (the “Series 2012A Pooled Program Bonds”), and (ii)one or more series of notes (collectively, the “Series 2012B Pooled ProgramNotes, and together with the Series 2012A Pooled Program Bonds, the previously defined “Series 2012Pooled Program Bonds”), either by the same sale method as the Series 2012A Pooled Program Bonds or by direct sale to the County; provided, however that the aggregate principal amount of the Series 2012A Pooled Program Bonds and the Series 2012B Pooled Program Bonds together with any other bonds issued under the Pooled Program Bond Resolution shall not exceed $38,056,000;
WHEREAS, the Series 2012Pooled Program Bonds, and any Additional Pooled Program Bonds defined under the Pooled Program Bond Resolution (collectively, the “Pooled ProgramBonds”) shall be issued pursuant to the terms of that certain “RESOLUTION AUTHORIZING THE ISSUANCE OF County OF MONMOUTH Guaranteed POOLED PROGRAM Renewable Energy Program Lease Revenue NOTES AND Bonds, Series 2012(federally taxable) AND ADDITIONAL BONDS OF THE MONMOUTH COUNTY IMPROVEMENT AUTHORITY” to be adopted by the governing body of the Authority, as amended and supplemented from time to time in accordance with its terms, including by one or more Certificates of an Authorized Officer of the Authority, each dated the date of issuance of the respective series of Series 2012 Bonds (the “Pooled Program Bond Resolution”), all in accordance with Sections 17-19 of the Act (N.J.S.A. 40:37A-60, 61 and 62) and all other applicable law;
WHEREAS, in order to implement the Renewable Energy Program, the Authority has determined that the proceeds of the Series 2012 Pooled Program Bonds shall be deposited with the trustee to be designated under the hereinafter defined Bond Resolution and be used to acquire one or more separate series of bonds (the “Series 2012A Bonds”) or notes (the “Series 2012B Notes”) for each Series 2012 Local Unit entitled “County of Monmouth Guaranteed Renewable Energy Program Lease Revenue [Notes] [Bonds], Series 2012 (Federally Taxable - [ ] Project” dated their date of delivery (collectively, the “Series 2012 Bonds”);
WHEREAS, any notes issued as Series 2012 Bonds may be refunded through the issuance of one or more series of notes or bonds issued as Series 2012 Bonds, so long as (i)the principal amount of such notes or bonds, each issued as Series 2012 Bonds and Outstanding in the aggregate at any one time under and as defined in the hereinafter defined Bond Resolution, does not exceed $50,000,000 and (ii)the interest rates thereon do not exceed the maximum interest rates set forth in the Local Finance Board Application;
WHEREAS, the Series 2012 Bonds shall also finance all other costs associated with the Renewable Energy Program that the Authority determines to be necessary, convenient or desirable for the successful implementation of the Renewable Energy Program, including without limitation (i)all or a portion of the Preliminary Program Costs, Administrative Expenses and Company Development Fees and Expenses (as such terms are defined in the hereinafter defined Bond Resolution), (ii)costs incurred in connection with the issuance of the Series 2012 Bonds, (iii)costs incurred or to be incurred in connection with the design, permitting, acquisition, construction, installation, operation and maintenance of the Renewable Energy Projects for the Series 2012 Local Units, (iv)costs incurred or to be incurred in connection with the design, permitting, acquisition, construction, renovation, and installation of the Capital Improvement Projects for the Series 2012 Local Units, if any, (v)capitalized interest and/or reserves, if any, and (vi)such other amounts as shall be set forth in the Bond Resolution (collectively, the Series 2012 Project”);
WHEREAS, the Series 2012 Bonds, and any Additional Bonds defined under the Bond Resolution (collectively, the “Bonds”) shall be issued pursuant to the terms of that certain “RESOLUTION AUTHORIZING THE ISSUANCE OF County OF MONMOUTH Guaranteed Renewable Energy Program Lease Revenue NOTES AND Bonds (county of MONMOUTH program), Series 2012 (FEDERALLY TAXABLE - [_____] PROJECT) AND ADDITIONAL BONDS OF THE MONMOUTH COUNTY IMPROVEMENT AUTHORITY” to be adopted by the governing body of the Authority, as amended and supplemented from time to time in accordance with its terms, including by one or more Certificates of an Authorized Officer of the Authority, each dated the date of issuance of the respective series of Series 2012 Bonds (the “Bond Resolution”), all in accordance with Sections 17-19 of the Act (N.J.S.A. 40:37A-60, 61 and 62) and all other applicable law;
WHEREAS, pursuant to N.J.S.A. 40:37A-77 of the Act, N.J.S.A. 40A:65-4 of the Uniformed Shared Services and Consolidation Act (as amended and supplemented from time to time, the “Shared Services Act”) and other applicable law, upon or prior to the issuance of the Series 2012 Pooled Program Bonds and the Series 2012 Bonds, the Authority shall have entered into a “License and Access Agreement (Monmouth County Renewable Energy Program, Series 2012)” to be dated as of the first day of the month of issuance of the Series 2012 Pooled Program Bonds and the Series 2012 Bonds (as the same may be amended or supplemented from time to time in accordance with its terms, each agreement shall constitute a “Local Unit License Agreement”, and collectively, the “Local Unit License Agreements”) with each Series 2012 Local Unit that would, among other things, provide the Authority and/or its assignees the right and obligation to (i)access the Local Unit Facilities of each such Series 2012 Local Unit, most particularly their roofs and electrical systems (the “Local Unit License”), (ii)finance, design, permit, acquire, construct, install, operate and maintain the Renewable Energy Projects on, in, affixed or adjacent to, or for the benefit of such Local Unit Facilities, (iii)finance, design, permit, acquire, construct, renovate, and install, the Capital Improvement Projects, if any, on, in, affixed or adjacent to, or for the benefit of such Local Unit Facilities, (iv)receive the right to the renewable energy produced from the Renewable Energy Projects financed by the Series 2012 Pooled Program Bonds and the Series 2012 Bonds, and (v)sell all or a portion of the renewable energy produced from such Renewable Energy Projects through the Authority to the respective Series 2012 Local Units, pursuant to an assignment (under each Local Unit License Agreement) from the Authority to the Series 2012 Local Units of the Power Purchase Agreement (as hereinafter defined), the terms of which Power Purchase Agreement could be entered into directly by the Series 2012 Local Units under N.J.S.A. 40A:11-15(45) of the Local Public Contracts Law (for the Municipal and County Series 2012 Local Units) and under N.J.S.A. 18A:18A-42(o) of the Public Schools Contracts Law (for the Board of Education Series 2012 Local Units);
WHEREAS, upon or prior to the issuance of the Series 2012 Pooled Program Bonds and the Series 2012 Bonds, and in accordance with (i)N.J.S.A. 40A:11-4.1(k) of the Local Public Contracts Law, (ii)Local Finance Board Notice 2008-20, December 3, 2008, Contracting for Renewable Energy Services, (iii)the State Board of Public Utilities (“BPU”) protocol for measuring energy savings in PPA agreements dated February 20, 2009 (Public Entity Energy Efficiency and Renewable Energy Cost Savings Guidelines), (iv)Local Finance Board Notice 2009-10 dated June 12, 2009, Contracting for Renewable Energy Services: Update on Power Purchase Agreements, and (v)all other applicable law, and pursuant to a competitive contracting process governed thereby, which shall include a request for solar developer proposals to be issued by the Authority (the “Company RFP”) and the receipt of proposals from prospective solar developers, including that (the “Company Proposal”) of the successful respondent (the “Company”), the Authority shall select the Company to (y)design, permit, acquire, construct, install, operate and maintain the Renewable Energy Projects and (z)design, permit, acquire, construct, renovate, and install the Capital Improvement Projects, if any, in both cases for the designated Local Unit Facilities of such Series 2012 Local Units, with such Program terms to be set forth in the following Company Documents to be entered into between the Company and, at a minimum, the Authority, or acknowledged by the Company, as applicable: